The Consumer Financial Protection Bureau is challenging a recent appeals court decision that its funding through the Federal Reserve Board violates the separation of powers doctrine. That ruling "threatens to inflict immense legal and practical harms" on financial regulation, the CFPB says.

Legal experts are gaming out the various options for the CFPB after a three-judge panel of the U.S. Court of Appeals for the 5th Circuit ruled on Oct. 19 that the bureau's funding is unconstitutional.

Regulators are raising alarm over the design applications that can manipulate consumers into buying products or services or compromise their personal information.

An appeals court ruling last week found that the Consumer Financial Protection Bureau's funding structure violates the Constitution, but another court filing shows how the agency might fight back.

"The main threat we see is coming from the CFPB, where the single director can act as judge, jury, and executioner, all in one," said Bob Broeksmit, president of the Mortgage Bankers Association

The Consumer Financial Protection Bureau's rules and enforcement actions to date could be open to legal challenges by banks and other companies after a three-judge panel deemed the agency's payday lending rule unconstitutional because of the way the agency is funded, legal experts say.

The U.S. Court of Appeals for the 5th Circuit overturned a lower court's ruling, declaring the agency's funding structure and its 2017 payday lending rule invalid.

A federal judge found that the Consumer Financial Protection Bureau overstated the costs and understated the negative impact of exempting 1,700 financial institutions from reporting Home Mortgage Disclosure Act data.

The trade groups, including the American Bankers Association, allege the Consumer Financial Protection Bureau exceeded its authority by claiming discrimination in any financial product violates the federal prohibition on "unfair, deceptive or abusive acts or practices."

The Consumer Financial Protection Bureau's latest request for information floats the idea of an "auto-refi" and potentially extending pandemic-related options like forbearance for permanent industry use.

The Consumer Bankers Association and the Center for Responsible Lending said the Consumer Financial Protection Bureau should renew its efforts to level the regulatory playing field between larger bank and nonbank companies that make installment and other kinds of personal loans.

Customers told the Consumer Financial Protection Bureau that bank customer service practices need a lot of work, but banks say more regulation would only make matters worse.

The allegations by Rep. Patrick McHenry and others were a response to a CFPB interpretive rule, even though states use their own laws prohibiting unfair and deceptive acts and practices.

In an internal memo to staff, Deputy CFPB Director Zixta Q. Martinez announced a realignment of the bureau’s legal and student loan offices with an expanded strategy team.  

The agency issued an advisory opinion warning that credit reporting bureaus and other entities using credit checks can no longer use disclaimers to bypass privacy protections.

In a new interpretative rule filed Tuesday, the agency gave states a green light to expand on federal laws that protect consumers from unfair treatment by credit reporting agencies.

Rohit Chopra, the director of the Consumer Financial Protection Bureau, is laying the groundwork to potentially declare that Facebook and another Big Tech firms pose risks to consumers.

The Consumer Financial Protection Bureau’s unified agenda was quietly released this week, and it shows that rules on consumer access to financial records and small-business data collection are top priorities. 

Without a rule standardizing data sharing standards, the Consumer Financial Protection Bureau risks the creation of a patchwork system of privacy standards as consumers seek the benefits of an open banking ecosystem.

The Consumer Financial Protection Bureau sent a mass email to thousands of the bank's customers and former employees to gather information about the possible creation of phony accounts. Critics — including a federal judge — say the CFPB asked leading questions and may have overstepped its bounds.